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The Role of Marketing in Product Development

Darrin C. Duber-Smith, MS, MBA

By Darrin C. Duber-Smith, MS, MBA
[email protected]

Product development is the foundation by which organizations set and reach measurable objectives related to Return on Investment (ROI), the primary responsibility of any for-profit company. It is therefore of paramount importance that organizational leaders understand contemporary marketing’s crucial role in the product development process. The answers lie in successful formulation of marketing strategy around the “Four P’s”-Product, Price, Place, and Promotion – areas that are now within the realm of what marketers must constantly manage. Obviously, the particular “P” that relates to product development is that of “Product.”

The Product Concept

Product development functions have not always been under the purview of the strategic marketing team, but during the past 25 years, this fact has become a basic tenant in sound marketing strategy. In the past, what we have come to know as the “product concept” dominated corporate strategic thinking. Research and development teams created product utilizing technology, intellectual property, and cost models without much analytical insight as to where these products might be marketed and to whom, as well as which particular needs they might address. Since markets have become increasingly global and complex, and the levels of competition have reached staggering heights, this outdated concept has, out of necessity, fallen by the wayside. It has become increasingly mandatory for marketing professionals to drive product development and product life cycle functions within the organization.

The Market Concept

Basic marketing science teaches us that the root of any well-developed strategic marketing plan lies in developing a product that is “need-driven.” The basic tenant of the “market concept” is that market needs and opportunities are assessed FIRST, and then products are developed to address and exploit them. Organizations, then, must not develop a product and then determine where, when, how, and to whom it will be sold - after the fact. Most company leaders who do not fully understand this fundamental, global shift in product development strategy are doomed to fail in one way or another, or at the very least, neglect the prime directive, the optimization of ROI.

This shift is not always accepted as good news to organizations that claim to be “R&D-driven,” yet we know that proper application of the market concept must never understate the importance of cutting edge research and development or leveraging intellectual property. The fact is, core competencies must be aligned with positioning and product differentiation strategies to achieve and maintain sustainable competitive advantages as well as address changing market forces and opportunities. Since it is marketing’s role to maintain constant vigilance regarding the dynamic marketplace, this group is ultimately responsible for ensuring that the right products are developed for the right market. Then, appropriate pricing, distribution, and promotional strategies can be developed and implemented to realize organizational objectives.

Cross-Functional Product Development Teams

Does this mean that R&D professionals are relegated to taking a “back seat,” and must therefore do the bidding of marketing people who have traditionally been viewed as out of touch with science? Absolutely not! Rather, marketing and science professionals must work together to create products that afford optimal opportunity for ROI and address real market needs.

Product development and life cycle management is a constant process. New products are developed to address market opportunity, current products must be constantly altered, and promotional strategies periodically adjusted to address a host of dynamic internal and external environmental factors. The savvy organization addresses these necessities by developing and managing products through “cross-functional” product management teams that include key players in both marketing and R&D areas, as well as finance, information systems, human resources, and other functional departments. Organizations can then harmonize market opportunities and competitive forces with internal capabilities to ultimately produce what amounts to the most optimal product strategy. Sourcing issues, patents, manufacturing capabilities, finance, and many other resource-related areas therefore remain as crucial components in deciding which products must be produced for which markets.

Cross-functional teams that utilize the market concept for optimal product development and product management not only strive to bring all necessary functional areas together to formulate an optimal marketing strategy, but also tend to generate much needed “buy-in” among all key players. In this way, an organization can insure against the squabbling that is so common among different interests, and develop need-driven products in the most efficient manner possible.

Darrin C. Duber-Smith, MS, MBA, is president of Green Marketing, a Colorado-based strategic planning firm offering marketing planning, marketing plan implementation, and other consulting services to natural products companies in all stages of growth. He has 15 years of specialized expertise in the natural products industry and is also Visiting Assistant Professor of Marketing at the Metropolitan State College School of Business in Denver, CO, as well as executive director of the International Association of Natural Product Producers. He can be reached at [email protected].

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